CANADA STOCKS-TSX falls on prospect the West will hit Syria

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* TSX falls 38.66 points, or 0.30 percent, to 12,721.64
* Eight of the 10 main index sectors decline
* Gold miners jump more than 2 percent as bullion gains
* BMO rises after results; Scotiabank slips
By John Tilak
TORONTO, Aug 27 (Reuters) - Canada's main stock index fell
on Tuesday as tensions in Syria raised the prospect the West
will launch a military strike, dampening sentiment and
offsetting gains in shares of energy and gold producers, which
rose on higher oil and bullion prices.
Also working into the mix, two major Canadian banks, Bank of
Montreal and Bank of Nova Scotia, reported
quarterly earnings that topped expectations.
The uncertainty about Syria fueled a rush to gold, a
perceived safe-haven asset, and bullion prices hit an 11-week
high. Oil prices gained as the likelihood of instability in the
Middle East increased supply concerns.
The United States and its allies could attack Syria within
days, Western envoys have told rebels fighting President Bashar
al-Assad, according to sources who attended a meeting of Syrian
opposition leaders and diplomats.
"It makes investors wary," said Fred Ketchen, director of
equity trading at ScotiaMcLeod. "You never know how far these
things can go, how much it can get out of hand and what the
effect is going to be."
The Canadian market, which hit a three-month high the
previous session, reflected weakness in world stock markets
spurred by worry over Syria.
The Toronto Stock Exchange's S&P/TSX composite index
was down 38.66 points, or 0.30 percent, at 12,721.64.
Eight of the 10 main index sectors were in the red, but both
of its resource groups were trading in positive territory.
The materials sector, which includes mining stocks, rose
almost 1 percent, with gold miners gaining more than 2 percent.
Goldcorp Inc added 2 percent to C$33.52, and Barrick
Gold Corp gained 1.8 percent to C$21.91.
Energy shares were up 0.4 percent. Canadian Natural
Resources Ltd jumped 2.5 percent to C$32.20, and Suncor
Energy Inc climbed 0.9 percent to C$36.13.
Financials, the index's most heavily weighted sector, lost
0.9 percent. Toronto-Dominion Bank fell 1.3 percent to
C$87.85.
Shares of Bank of Montreal hit a 52-week high after the
company said its third-quarter profit rose 17 percent,
benefiting from higher insurance income and lower provisions for
bad loans. The stock gave up some of those early gains to trade
slightly higher at C$65.82.
Bank of Nova Scotia posted a slightly stronger-than-expected
quarterly profit and raised its dividend. The stock slipped 1
percent to C$58.08.
"(The results) foster the reputation that Canadian banks
have had, that they're a pretty safe place to invest your money,
with regular dividend increases and higher profits," said
Ketchen, who owns shares of both Scotiabank and BMO.